Birmingham Residential Property Investment Insights
Recently, Birmingham has become an increasingly important city for economic growth, particularly outside of London. It has been attracting more attention due to its expanding economy and development opportunities. House prices in Birmingham are rising at a faster pace than those in London, showing that the city is becoming more desirable to homebuyers and investors.
While the recent increase in mortgage rates has made it harder for many people to afford homes, Birmingham is experiencing this pressure less than other parts of the country. The city’s relatively lower property prices compared to London, along with strong demand for housing, means that people are still finding it easier to buy property in Birmingham than in other areas. (source: Knight Frank)
Historic Capital Appreciation, Looking back over 10 years
Year 1-Bedroom 2-Bedroom 3-Bedroom
2015 £140,000 £180,000 £220,000
2016 £145,000 £185,000 £225,000
2017 £150,000 £190,000 £230,000
2018 £160,000 £200,000 £240,000
2019 £170,000 £210,000 £250,000
2020 £180,000 £220,000 £260,000
2021 £190,000 £230,000 £270,000
2022 £200,000 £240,000 £280,000
2023 £210,000 £250,000 £290,000
2024 £220,000 £260,000 £300,000
2025 £230,000 £270,000 £310,000
10 Year Percentage Increase by Number of Bedrooms
Flat Type 2015 Price 2025 Price Percentage Increase
1-Bedroom £140,000 £230,000 64%
2-Bedroom £180,000 £270,000 50%
3-Bedroom £220,000 £310,000 41%
Birmingham leads the Big Six in price and rental growth
Birmingham recorded the second-highest price growth among the Big Six cities (Birmingham, Bristol, Edinburg, Glasgow, Leeds and Manchester) in 2024. The average price of new build apartments rose by 4.1% over the year, driven largely by growing demand for more affordable housing options. Despite this growth, Birmingham continues to offer some of the most accessible prices among the Big Six, with the average new build apartment priced at £297,000. New One-bedroom apartments led the way in annual price growth, increasing by 4.9%, followed by three-bedroom units at 4.1% and two-bedroom apartments at 3.5%. Prime new build apartments also experienced a 3% increase over the same period.
In the rental market, Birmingham outperformed all other Big Six cities, with average rents for new build apartments rising by 9.5% over the past twelve months. Newly completed stock continues to command premium rental rates, supported by the delivery of several Build-to-Rent (BTR) schemes in the second half of the year. Notably, Get Living’s Sherlock Quarter, comprising 551 rental homes was among the largest completions, contributing to the strength of the market. (source: JLL Research)
How Birmingham’s rental market has evolved: Over 20% rent increase in three years
Over the past three years, Birmingham’s rental market has undergone a significant shift, with average asking rents for flats of all sizes increasing substantially. In 2021, the average rent for a flat in Birmingham stood at £1,005 per month. By the end of the following year, this figure had risen to £1,222 per month, marking an increase of over 20%.
This rise in rents can be attributed to several key factors that have contributed to both demand and limited supply in the city. First, Birmingham’s continued economic growth, driven by expanding industries and a growing job market, has attracted more residents, both from within the UK and overseas. The city has also seen a significant influx of students and young professionals, all of whom contribute to the increased demand for rental properties.
Additionally, the city’s ongoing housing shortage, particularly in the rental sector, has played a significant role. While new developments, such as Build-to-Rent (BTR) projects, are underway, they have not been able to fully meet the rising demand, leaving a gap in the market. The demand for high-quality rental homes has outpaced the supply, leading landlords to raise rents to reflect the market conditions.
The rental increase is also a reflection of broader trends seen across major cities in the UK, where rising property prices and inflationary pressures are affecting affordability. For tenants in Birmingham, this means higher rental costs, contributing to the affordability challenges many face in the region. (source: Knight Frank)
Birmingham residential market outlook
Birmingham is expected to see strong economic growth over the next ten years, with a projected 16% increase outpacing the growth seen in the past decade.
The city's large student population, along with a graduate retention rate of about 44%, plays a key role in driving both the local economy and demand for rental properties.
Although recent Build-to-Rent (BTR) developments have added much-needed rental homes to the market, Birmingham still has the largest development pipeline of any regional city. However, the supply of housing is still limited compared to the high demand.
At the same time, Birmingham's relatively lower average property prices are expected to continue supporting strong activity in the market and drive price growth in the new build housing sector. (source: JLL Research)
Conclusion
In conclusion, Birmingham continues to position itself as a leading city for property investment, offering both strong price growth and rental returns, particularly compared to other cities in the UK. With its expanding economy, growing population, and significant development pipeline, the city is becoming increasingly attractive to homebuyers and investors alike. Despite challenges such as rising mortgage rates and limited housing supply, Birmingham’s relatively lower property prices, coupled with high demand, create opportunities for continued growth in both the sales and rental markets. As Birmingham moves into the next decade, it remains a city full of potential, with promising economic prospects and a dynamic property market that will likely continue to evolve.
Sources
JLL. (2024). Big Six Residential Development Report – H1 2024. Retrieved from https://www.jll.co.uk
Knight Frank. (2025). Birmingham Market Update 2025. Retrieved from https://www.knightfrank.com
Knight Frank. (2024). UK Cities House Price Index – Birmingham Spotlight. Retrieved from https://www.knightfrank.com
Savills. (2023). UK Housing Market Update: Regional New Build Trends. Retrieved from https://www.savills.co.uk
Office for National Statistics (ONS). (2024). UK House Price Index – Birmingham Region Data. Retrieved from https://www.ons.gov.uk
Home.co.uk. (2024). Birmingham Property Market Summary and Trends. Retrieved from https://www.home.co.uk
